Sample Flashcards

Which of the following is an example of a 'level production strategy' in aggregate planning?

Answer: Maintaining a constant workforce and production rate while using inventory to absorb demand variation

A level strategy maintains a stable workforce and production rate, using inventory buildup during slow periods and depletion during peak periods to absorb demand variability.

In distribution requirements planning (DRP), what triggers a replenishment order from the central warehouse to a field distribution center?

Answer: When projected on-hand inventory falls below the reorder point or safety stock

DRP generates planned replenishment orders at each level of the distribution network when projected on-hand inventory is expected to fall below the safety stock or order point.

Which quality management tool is MOST appropriate for identifying and prioritizing the root causes of a production defect?

Answer: Pareto chart

A Pareto chart ranks defect causes by frequency or impact, illustrating that roughly 80% of problems stem from 20% of causes, helping teams prioritize corrective action.

A company wants to reduce its order-to-delivery lead time without changing its production process. Which strategy would MOST effectively achieve this?

Answer: Switching from MTO to assemble-to-order (ATO)

ATO moves the customer order decoupling point later by pre-building sub-assemblies, allowing final assembly to begin immediately upon order receipt, dramatically reducing customer-facing lead time.

In supplier management, a 'vendor-managed inventory' (VMI) arrangement means:

Answer: The vendor monitors the customer's inventory and independently triggers replenishments

In VMI, the supplier takes responsibility for monitoring the customer's inventory levels and initiating replenishment orders, reducing the customer's ordering burden and improving supply responsiveness.

Which of the following BEST describes the concept of 'available to promise' (ATP)?

Answer: The uncommitted portion of inventory and planned production that can be promised to new customers

ATP is calculated by subtracting existing customer order commitments from on-hand inventory and planned production receipts, representing what can be committed to new orders.

A company is evaluating two suppliers. Supplier A has lower unit cost but higher demand variability impact; Supplier B has higher cost but superior delivery reliability. In a lean environment, which factor should receive GREATEST weight?

Answer: Delivery reliability, as lean systems have minimal buffer to absorb supply disruptions

Lean environments operate with minimal safety stock, making delivery reliability paramount — an unreliable low-cost supplier can cause line stoppages that far outweigh any unit cost savings.